If a candidate for elected office is allowed to spend money to
communicate his message, but only at a severe penalty to his
campaign, is this constitutional?

The United States Supreme Court issued an opinion in a case called Davis v. Federal Election Commission,
also referred to as the Millionaire’s Amendment case, which addresses
this question.  A Congressional candidate was allowed to spend his
own personal money, but once he exceeded a certain amount of spending,
his opponent was given all kinds of fundraising advantages, such as
higher contribution limits.

The Court held that punishing speech in this manner was unconstitutional.

The question I discussed in a recent Raleigh News and Observer op-ed
is how this case would affect North Carolina’s taxpayer financing
systems.  In these systems, a candidate that does not take
taxpayer dollars (a traditional candidate) may spend his money, but if
he spends beyond a threshold level, the opposing candidate, if taking
taxpayer dollars (a subsidized candidate), automatically gets what are
called matching funds. 

For example, if Candidate A (the traditional candidate) spends $10,000
over the designated threshold level, Candidate B (the subsidized
candidate) automatically receives $10,000 to match Candidate A’s
spending.

These systems though are even worse than the system in the Davis case,
for many reasons.  One reason is independent groups (e.g. PACs)
that support Candidate A can trigger matching funds to Candidate
B.  So the independent groups are simply punished for supporting
one candidate over another (a content-based punishment). 
Candidate A also has no real control over when matching funds will be
triggered because independent groups can trigger these funds.

As I wrote in the op-ed, any reasonable interpretation of the Davis
case would lead to the conclusion that NC’s taxpayer financing systems
are unconstitutional.

The impact of Davis on taxpayer financing systems is already being
felt.  The New Jersey legislature was considering a pilot program
that would have included matching funds.  The legislature, doing
the correct thing, first determined whether such a system would even be
constitutional after Davis.  The New Jersery Legislative Counsel’s
Office explained that after Davis, these systems are likely unconstitutional.

In Arizona, opponents of the state’s taxpayer financing system tried to
stop matching funds from being provided in the 2008 election.  A
federal district court did not block the funds from being issued (due
to timing and the impact on the election), but generally agreed with the merits of the legal argument–that matching funds are unconstitutional.

The NC legislature should immediately repeal these unconstitutional
systems or at least place a moratorium on them until it is established
that, after the Davis opinion, they are legal.